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Trade and Development Report 2017

Beyond Austerity - Towards a Global New Deal

The Trade and Development Report (TDR), launched in 1981, is issued every year for the annual session of the Trade and Development Board. The Report analyses current economic trends and major policy issues of international concern, and makes suggestions for addressing these issues at various levels. This year’s Report focuses on the challenges for achieving inclusive growth in an era of austerity, hyper globalization and financial fragility. It includes chapters on robotics, gender and employment, finance and inequality, and the growing market power of non-financial corporations. It concludes by calling for Global New Deal, and the sorts of policy components it must include in light of the analyses provided.

Robots, industrialization and inclusive growth

Employment opportunities, and the income they generate, are a major determinant of inclusive growth. Economists, policymakers and the general public have long accepted that technological change greatly affects employment opportunities. Historically, it has offered novel ways of producing and consuming goods and services, created new profitable areas of economic activity, and underpinned rising living standards. In the process it freed humans from physically demanding, repetitive or dangerous work. However, the creative side of new technologies often has disruptive consequences for the existing practices and structures of economic life, including the outright destruction of companies, markets and jobs, with no guarantee that the gains from the new processes will fully compensate for the losses. Over time, the distributional consequences of new technologies depend on the scope of subsequent job opportunities and the pace at which they materialize. In large part this is because new technologies do not arrive as a deus ex machina but are embodied in (and disseminated by) capital equipment, institutional routines and human capabilities, and their impact is, therefore, conditioned by macroeconomic circumstances and policy responses.